Washington Extra – Fear factor

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Japan faced a potential nuclear catastrophe after explosions at three reactors at a nuclear power plant sent radiation toward Tokyo. The fear factor sent shivers through world stock markets which tumbled.

Fear also reportedly prompted some Americans to buy potassium iodide tablets and Geiger counters. Good idea?

Reuters energy correspondent Tom Doggett reports that Energy Secretary Steven Chu didn’t see the necessity. “I think there’s essentially no concern in terms of the health effects on American shores. So, I think that they really shouldn’t be doing those things quite frankly, but, you know, it’s a free country,” Chu said after a hearing.

Since the Japan nuclear crisis, the administration has kept repeating President Barack Obama’s policy for expanding nuclear power as part of the U.S. energy mix. And today was no exception.

Chu said lessons could be learned from Japan, but that was not a reason to delay expansion. “I think those things can proceed,” he said.

We’re thinking today was probably not the luckiest day for NCAA college basketball picks, but were told that Obama did it anyway (to be revealed on ESPN tomorrow).

After clairvoyant octopus Paul’s World Cup predictions and Heidi the opossum’s Oscar picks, we’re looking for a psychic critter to help with our own NCAA bracket…

Here are our top stories from Washington…

U.S. energy chief: don’t delay new nuclear plants

U.S. regulators should press ahead with approving construction licenses for new nuclear power plants despite Japan’s nuclear crisis, President Barack Obama’s top energy official said. Energy Secretary Steven Chu said lessons could be learned from Japan, where an earthquake-crippled nuclear power plant exploded and blasted radiation into the air, but that was not a reason to delay expansion in the United States. “I think those things can proceed,” Chu told reporters on Capitol Hill, referring to construction license applications pending at the U.S. Nuclear Regulatory Commission.

The military took new steps to shield personnel from radiation spread by Japan’s crippled nuclear plant, redirecting arriving warships to safer waters and telling some forces to limit time outdoors. But the Navy said it would not stop flying relief missions to help Japan after its devastating earthquake and tsunami, even as more flight crews were exposed to low-level — but higher than normal — radiation.

Congressional Republicans will try to stop the EPA from regulating greenhouse gases by attaching the measure to an unrelated bill up for debate in the Senate. Having successfully blocked climate control legislation over the last several years, Republicans are now moving to squelch EPA regulations kicking in this year. “Imposing a backdoor national energy tax through the EPA is a strange way to respond to rising gas prices,” Senate Republican leader Mitch McConnell said.

Wary of a new foreign entanglement, President Barack Obama is taking a cautious approach on a no-fly zone over Libya that is leaving him open to charges of dithering as Libyan rebels lose ground. Obama’s deliberative tone on the issue reflects his desire for international cohesion and his determination that U.S. forces should only be sent into battle when vital national security interests are at stake.

Saudi Arabia’s military intervention in Bahrain has exposed a diplomatic rift as Riyadh and Washington make different calculations over a crisis that could have a far-ranging impact on their relations. Close Saudi-U.S. ties anchor stability in the oil-rich Gulf. The autocratic Sunni Muslim monarchy provides 12 percent of U.S. crude imports and serves as a powerful regional counterweight to Shi’ite-ruled Iran, a defiant U.S. foe. But when Saudi troops rolled across the causeway into neighboring Bahrain on Monday to buttress the embattled Sunni royal family against protests by the island’s Shi’ite Muslim majority, Washington scrambled to respond as its own repeated pleas for negotiation appeared to have been swept aside.

The commander of U.S. and NATO forces in Afghanistan delivered an optimistic assessment of the unpopular war, telling lawmakers his troops will continue to make headway against Taliban insurgents even with a drawdown of American troops set to begin in July. “There have been setbacks as well as successes. Indeed, the experience has been akin to that of a roller coaster ride,” General David Petraeus told senators. “Much difficult work lies ahead.”

The Federal Reserve maintained its ultra-loose monetary policy, saying the economy was gaining traction while flagging potential inflation risks from costlier energy and food. The widely expected decision comes on a day of steep selling on stock markets around the world as investors assessed the devastating toll of Japan‘s earthquake and tsunami, and fretted over the possibility of a broader nuclear crisis. The Fed vowed to continue its $600 billion government bond-buying program as scheduled, and reiterated a pledge to keep interest rates at very low levels for an extended period.

For more of this story by Pedro da Costa and Mark Felsenthal, read here.

Geithner seeks quick foreclosure pact with banks

A comprehensive settlement between authorities and banks over alleged mortgage servicing abuses needs to be reached quickly to help the housing market heal, Treasury Secretary Timothy Geithner said. He said such a settlement will help dispel legal uncertainty that has been plaguing mortgage lenders and clogging the foreclosure process.

For more of this story by Dave Clarke and Rachelle Younglai, read here.

House set to pass stopgap funding bill

House Speaker John Boehner signaled Congress is making headway on settling the government’s budget for this fiscal year, despite Tea Party conservatives digging their heels in. “We’ve been in conversations with the Senate and the White House. We’re hopeful we’ll have a long-term continuing resolution through September 30 and we’re hopeful that we’ll have it soon,” he told reporters.

Four senators urged President Obama’s administration to step up its fight against China’s “hoarding” of critical rare earth elements by blocking funding for Chinese mining projects. “Just like they do with their currency, the Chinese government engages in unfair anti-competitive and downright illegal practices involving these elements,” Senator Charles Schumer told reporters.

Circuit breakers in other countries could help prevent a major market disruption worse than what occurred in the United States last May, a top futures regulator said. “Should these types of circuit breakers be harmonized in other nations? Maybe,” Bart Chilton, a commissioner at the CFTC, said at a trade and finance conference. ”If the Flash Crash had taken place in the morning on May 6th, when EU markets were open, it could have instigated a global economic event.”

The first targeted legislative challenges to 2010′s Dodd-Frank financial regulation reforms are emerging in the Congress, with nine senators introducing a bipartisan bill to delay a proposed cap on debit card interchange fees. The cap, proposed by the Federal Reserve as required under Dodd-Frank, threatens the profits of card networks and big banks. Industry lobbyists have been working hard to block it.

A government plan to upgrade U.S. roads and rails would kick-start an infrastructure bank by putting in enough funds to lure private investment and eventually become self-sustaining, according to a proposal to be unveiled in the Senate. The bipartisan plan advanced by Democrat John Kerry and Republican Kay Bailey Hutchison envisions a financing institution for loans and loan guarantees modeled on the Export-Import Bank, according to Senate sources with knowledge of the proposal.

Nearly all trials and other federal court proceedings might come to a halt if the U.S. government shuts down because Congress cannot agree on the budget, the federal judiciary’s policy-making body warned.

Author Profile

Toby covers national security. She used to run the Front Row Washington politics blog, was a White House correspondent during President George W. Bush's second term, and has covered intelligence, defense, foreign policy, and Congress. As Dallas correspondent she covered the stand-off in Waco. Early years in New York were spent covering financial markets and New York Fed.